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Allison Jackson – AFP March 4, 2012

China announced a double-digit hike in military spending in 2012, in a move likely to fuel concerns about Beijing’s rapid military build-up and increase regional tensions.

The defence budget will rise 11.2 percent to 670.27 billion yuan ($106.41 billion), said Li Zhaoxing, a spokesman for China’s national parliament, citing a budget report submitted to the country’s rubber-stamp legislature.

The figure marks a slowdown from 2011 when spending rose by 12.7 percent but is still likely to fuel worries over China’s growing assertiveness in the Asia-Pacific region and push its neighbours to forge closer ties with the United States.

Li described the budget as “relatively low” as a percentage of gross domestic product compared with other countries and said it was aimed at “safeguarding sovereignty, national security and territorial integrity”.

“We have a large territory and a long coastline but our defence spending is relatively low compared with other major countries,” Li told reporters on Sunday.

“It will not in the least pose a threat to other countries.”

China has been increasing its military spending by double digits for most of the past decade, during which time its economy, now the world’s second largest, grew at a blistering pace.

The People’s Liberation Army — the world’s largest with an estimated 2.3 million troops — is hugely secretive about its defence programmes, but insists its modernisation is purely defensive in nature.

The rapid military build-up has nevertheless set alarm bells ringing across Asia and in Washington, which announced in January a defence strategy focused on countering China’s rising power.

Analysts said the smaller-than-expected increase in spending this year was an attempt by Beijing to ease concerns in the United States and the region about its growing military might.

“It is doubtful whether the message will get across because most countries know that the real budget is at least double the published one,” said Willy Lam, a leading China expert at the Chinese University of Hong Kong.

Lam said funding for modernising the country’s military was not included in the published budget, which mostly covered salaries for defence personnel and maintenance of existing equipment.

Money for research and development of modern weaponry “comes from elsewhere”, he said.

Taiwan-based PLA expert Arthur Ding said the still considerable growth in this year’s budget would push “regional countries to try to build closer ties with the United States”.

“China has to explain and try to convince the regional countries why they need such a high growth rate,” Ding told AFP.

Tokyo has repeatedly questioned Beijing’s military intentions. A Japanese government-backed report last month warned that Beijing’s assertiveness in the South China Sea could soon be replicated in neighbouring waters.

China lays claim to essentially all of the South China Sea, where its professed ownership of the Spratly archipelago overlaps with claims by Vietnam, the Philippines, Taiwan, Brunei and Malaysia.

Beijing and Tokyo also have a long-standing dispute over an uninhabited but strategically coveted island chain known as Senkaku in Japanese and Diaoyu in Chinese, which lies between Japan and Taiwan in the East China Sea.

The two sides have occasionally clashed diplomatically over the issue, most notably in late 2010, when Japan arrested the captain of a Chinese fishing vessel near the island chain after a collision with its coastguard.

China began revamping the PLA — the former ragtag peasant force formed in 1927 by the Communist Party — in earnest after a troubled 1979 incursion into Vietnam, when the neighbours vied for influence over Southeast Asia.

Besides conventional weaponry upgrades, the push also led to China’s fast-growing space programme and the test of a satellite-destroying weapon in 2007.

Last year it unveiled its first aircraft carrier, a 300-metre-long (990-foot) former Soviet naval vessel that had its first sea trial in August.

China’s defence budget is expected to double between 2011 and 2015 and outstrip the combined spending of all other key defence markets in the Asia-Pacific region, global research group IHS said last month.